TMI Blog2015 (2) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... out giving adequate opportunity to the Appellant, on the alleged ground that no satisfactory evidence was furnished for the same. II. The Appellant prays that it be held that no adequate opportunity had been given to it and hence the order passed u/s. 271 (1) (c) of the Act be held as ab-initio and/or otherwise void and bad-in-Law. WITHOUT PREJUDICE TO THE ABOVE GROUND II: 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in levying penalty of ₹ 66,36,077/- u/s section 271(1)(c) of the Act on the alleged ground that there was concealment of income and that the Appellant had furnished inaccurate details of income with respect to the long term capital loss claimed by the Appellant. 2.The Appellant prays that a mere difference in opinion would not amount to raising a question on the bonafide claim made by the Appellant with respect to the Long term capital Loss. 3.The Appellant prays that the said penalty levied by the AO and confirmed by the CIT(A) be deleted. 2. At the time of hearing, ld. Counsel for the assessee, Shri Haresh G. Buch, contended that substantial question of law has been admitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. A.O. observed the details and noted that the units valued at ₹ 7,14,42,394/- were purchased during A.Yrs. 1992-1993 to 2001-2002 and have been sold by way of repurchase by UTI and after repurchase the same were invested in tax free bonds. A.O. referred to Sub section 6 of section 45 and noted that non obstante clause which mentions that the difference between the repurchase price of the units and capital value of units shall be deemed to be capital gains arising to the assessee in the previous year in which such a repurchase takes place and will be taxed accordingly. In view of these facts A.O. disallowed the claim of long term capital loss of ₹ 6,34,72,767/- and allowed short term capital loss at ₹ 97,17,302/-. On appeal, the Ld.CIT(A) made enhancement of ₹ 97, 17,302/- which had been allowed by the A.O. as short term capital loss and was allowed to be carried forward. Accordingly. the A.O. levied minimum penalty of ₹ 66,36.077/- treating that the assessee has deliberately furnished inaccurate particulars of its income and sought to evade income to the extent of ₹ 6,34,72.767/-. 3.2 During the course of appellate proceedings the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Vs. Indian Metals Ferro Alloys Ltd. 211 ITR 35 (Ori.) viii. Nuchem Ltd. Vs. DCIT. 47 ITD 487 (Del.) ix. Associated Cement Companies Ltd. Vs. DCIT, 40 ITD 70 (80m.) In view of these submissions, appellant prayed that penalty levied u/s.271 (I )(c) amounting to ₹ 66,36,077/- may be dropped. 3.3 I have considered the facts of the case, perused the penalty order and submissions made by the appellant and also discussed the case with the A/R of the appellant. The A.O. made disallowance of long term capital loss on sale of units of UTI but allowed the short term capital loss (difference between purchase price sale price of units) to be carried forward. While considering the issue during first appellate proceedings, the Ld.CIT(A) in Para 1.13 of his order No.CIT(A)-XIIT/275/2006-07 dated 28.11.2008 observed as under: 1.13 However, in the course of appellate proceedings, it was noticed that the capital gains accruing on US 64 were specifically exempted from taxation u/s. l0(33). Therefore, vide order sheet entry dated 18.ll.2008, the assessee was specifically asked to show cause as to why the capital loss should not also be disallowed on transfer of US 64. In ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f u/s.10(33) in its return of income and hence the claim or loss was not bonafide. The appellant has further stated that the A.O. has no where concluded the disputed amount were consciously concealed or had deliberately furnished inaccurate particulars. This argument of the appellant is unfounded in view of the judgment of Hon'ble Supreme Court in the case of Union of India VsI Dharmendra Textile Processors (2008) 306 ITR 277, where in order dated 29.9.2008 it was held that the object behind enacting section 271(1)(c) read with explanation indicates that the said section has been enacted to provide a remedy for loss of revenue. Penalty u/s. 271(1)(c) is a civil liability . Willful concealment is not essential ingredient for attracting a civil liability as in the matter of prosecution u/s. 276C. Thus, it may be noted that the appellant has failed to offer an explanation before the A.O. by way of not responding to penalty notice u/s.271(1)(c). Even during the course of appellate proceedings it failed to prove that its action to claim loss was bonafide. In view of these facts and legal position. I am of the considered opinion that the penalty u/s.271(1)(c) has rightly been impose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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